DOJ Sues New York and PPL Over Alleged Fraud in Revamping CDPAP Program

On June 16, the Department of Justice (DOJ) sued the New York Department of Health (DOH), the DOH Medicaid Director, and Public Partnerships LLC (PPL) – the Georgia-based company selected by DOH in 2025 to manage New York’s Consumer Directed Personal Assistant Program (CDPAP) – in federal district court. The lawsuit alleges that the defendants engaged in health care fraud, conspiracy, and false statements concerning, among other things, the fairness of the bidding process leading to the selection of PPL as CDPAP’s sole fiscal intermediary, PPL’s ability to perform the contract terms and the resources it would bring to the transition process, the rates at which PPL would be compensated, the rates and benefit packages that caregivers would receive, the progress of the transition, the impact of the transition on caregivers and consumers, and the payment source for its costs and profits, which were allegedly taken from direct care costs in violation of the contract terms.^[1]

Justice Department officials announcing the lawsuit described the contract award as a “backroom deal” between New York and PPL that “has cost taxpayers millions of dollars and cast countless Medicaid patients to the curb” and asserted that “New York’s failure to police a favored vendor that unlawfully siphoned millions of dollars of Medicaid funding is egregious and betrays the public trust.” Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division stated that DOJ was acting “to ensure that federal laws regarding truthful statements and fair dealing in federal health care programs are upheld and to prevent additional harm from being exacted against the public by [PPL] and New York.”

The DOJ press release accuses PPL of generating “millions of dollars in unauthorized profits funded by federal taxpayers” through an allegedly fraudulent “takeover of New York’s $10 billion-dollar CDPAP program,” explaining that “[t]he lawsuit alleges that the New York Department of Health awarded PPL the lucrative CDPAP contract after conducting a sham bid process, and then, despite learning of PPL’s intent to deviate from the representations made in its bid and violate the financial terms of the contract, failed to take action to hold PPL accountable and to protect public funds from misuse, resulting in a fraud scheme that remains unchecked to this day.”

The lawsuit seeks injunctive relief enjoining the defendants from committing further violations of federal criminal law (18 U.S.C. §§ 371, 1035, 1347, 1349) and restraining PPL specifically from “alienating or disposing of property obtained as a result of the violations described,” “prohibiting any person from withdrawing, transferring, removing, dissipating, or disposing of an amount equivalent to any property PPL obtained as a result of the violations described,” and appointing a receiver to administer the restraining order.

If you have any questions about this article or DOJ’s lawsuit against DOH and PPL, you may contact the author at Geoffrey.Kaiser@rivkin.com or 516-357-3161.

[1] https://www.justice.gov/opa/pr/department-justice-files-suit-stop-ongoing-medicaid-fraud-related-new-yorks-10-billion-home and https://www.justice.gov/opa/media/1446226/dl